Educational institutes exempted from service tax

In a major relief to all educational institutes, the Central Board of Excise and Customs (CBEC) has exempted all educational institutions from paying any service tax for any service being provided to them.

The order issued in September this year, is still not known by many running educational institutes here in the city.

When paying service tax was announced as mandatory by all business and commercial establishments, the educational institutes had then sought a clarification. On clarification sought by various educational organisation, CBEC stepped ahead and clarified through its circular that no service tax shall be charged on services provided to the educational institutions.

This would certainly allow such institutions to save a lot of amount which may be further applied for the betterment of educational services.

Notably, educational institutions have been relieved from paying service tax on the services availed by them which provide assistance in running of their institution. These services are termed as “Auxiliary Educational Services”, which means any services which provide supplementary or additional help and support. Various services like canteen services, security services etc are those which are providing additional help and assist the educational institutes to concentrate on their core area of education.

Meanwhile, this move would obviously prove a boon for such institutes, as this would enable them to provide better education and infrastructure to the students.